Another ghost cattle fraud scheme has left investors and lenders litigating millions of dollars and tens of thousands of “missing” cattle following the death of a Kentucky cattleman.
While Easterday Ranch still holds the record of defrauding its victims with ghost cattle valued at $244 million, Brian McClain’s cattle fraud may have resulted in up to $100 million in losses for investors and lenders, according to reports.
This Wednesday, the U.S. Department of Agricultural Marketing Services issued a notification that anyone who sold livestock to and hasn’t received payment from McClain Farms Inc., 7M Cattle Feeders Inc., McClain Feed Yard Inc., or Brian McClain needs to file Dealer Trust claims promptly.
McClain passed away on April 18 from a reported suicide.
Rabo Agrifinance, LLC. filed suit against their lendee McClain Farms, Inc. and other associated businesses on April 25 in the Kentucky Western District Court. The suit pursues claims against McClain Farms Inc., MAP Enterprises Inc., Wildforest Cattle Co., and other defendants regarding $50 million in funds owed by defaulted loan agreements.
In a summary of the suit, Rabo Agrifinance’s complaint alleges that despite having pledged all property and assets as collateral in loan agreements, McClain sold 20,000 head of livestock worth at least $20 million to MAP and Wildforest after the default.
Following this, McClain Farms Inc., 7M Cattle Feeders Inc., and McClain Feed Yard Inc., filed bankruptcy petitions on April 28 with the U.S. Bankruptcy Court for the Northern District of Texas.
In their release, the USDA states that any unpaid livestock sellers may be protected under a provision of the Packers and Stockyards Act of 1921, that requires all livestock purchased by a dealer in cash sales, and all receivables or proceeds from such livestock to be held in trust for the benefit of all unpaid cash sellers.
Unpaid sellers must act quickly as the law requires that claims be filed with USDA and McClain within 30 days after payment is due, or within 15 business days after a payment instrument issued to the livestock seller has been dishonored. Claim amounts should be for the gross amount McClain agreed to pay for livestock.
Claims should be submitted to: Agricultural Marketing Service, Fair Trade Practices Program, Packers and Stockyards Division, Midwestern Regional Office, 210 Walnut Street, Room 317, Des Moines, IA 50309. Claims may also be emailed to PSDDesMoinesIA@usda.gov.
For questions regarding the claims process, please contact the PSD Midwestern Regional Office at (515) 323-2579.
